"Preferred stock is generally bought for its fixed dividend, but it is not as volatile as the common stock of the same company. If the common stock rises sharply, the convertible preferred stock will rise more than the preferred stock without the convertibility feature. Thus, the convertible feature allows the investor to enjoy a fixed income in a flat market, but also to profit from any significant rise in the market price of the common stock."
in other words, if the PPS spikes, Morris stands to make far more if his shares are converted to common stock than he would if he left them as preferred shares alone.
I thought about that too. Also looking back to 2009 they (the Cotswold Foundation) sold Elite shares back then too. Not as many but still, why sell any at all at that point? We don't know and probably never will.
Yeah, I just confirmed it was tax-exempt, I couldn't find that out, so it could have been for a tax write-off. It doesn't make much sense otherwise. He wouldn't be privy to insider info and I doubt a man in his position, if he were, would convert and sell his shares before bad news and risk legal trouble so I am not at all worried about that. Since it was just the foundation selling it probably does have something to do with a write-off though I am certainly no expert on that sort of stuff.
Fwiw, just the Cotswald Trust foundation sold and they seem to have exceptionally bad investing skills. I pointed out in another thread that they bought HEB in 12/2006 and sold in 4/2009 a day or two before price took off from .50 to $2.50 in a spectacular parabolic rise, so this could actually be a very good omen for us lol.
I suppose if he starts selling all the other shares I'd be quite concerned but at this point I am not. No one has any clue why this happened, I prefer to stick to the facts of the company and not get hung up on why one shareholder liquidated a portion. Could even have been for tax purposes, who knows, to offset the gains he knows are coming. I have to wonder if the same was done with the HEB sale just before the blast-off. Just mulling it all over...
Hey if I was right everytime I would have my own Foundation. Still plan on holding the course and as I said was a theory. Also if he sells the remaining 75% he still owns I will be the first to admit that it sucks.
So, he only sold off a portion of his shares is that correct? The portion that was set up for the foundation but holding the wife and kid accounts?
This really does nothing to change my long term investment strategy with Elite. I am anxious to hear news but if nothing comes out in the short term, no worries, Elite is traditionally very conservative with news reports and I can wait to see what the earnings report is at the ned of June.
There are still just way to many positive variables involved with this company that does not justify such a low PPS compared to other small bio companies who are trading over a dollar or more.
The new management and business model is in place and positive results have been obtained in the short term. I fully anticipate the will also achieve their mid and long term strategy goals as well. I am looking at this stock as a minimum 1-3 year investment from this point before we start to see the full growth potential of Elite. Look at what AMRN has done over the past 1-2 years and their recent heart pill which is still in trial stages.
If you are a true long, don't worry about a few pennies up or down and don't bother watching the computer 24/7. Trust your DD and belief that the company is on the right path for growth and positive earnings. This is just my opinion of course and you can form your own opinion(s)...good luck